China’s foreign ministry is demanding that Canada release Meng Wanzhou, the chief financial officer of Huawei Technologies, and the daughter of its founder. She faces possible extradition to the United States.

Meng, chief financial officer of Huawei Technologies Ltd., was detained over suspicions the company was trying to evade US trade curbs on Iran.

Huawei, the biggest global supplier of network gear used by phone and internet companies, has been the target of deepening US security concerns. Under President Donald Trump and his predecessor, Barack Obama, Washington has pressured European countries and other allies to limit use of its technology. The US, Australia and many other nations see Huawei and smaller Chinese tech suppliers as possible fronts for spying.

A Chinese government statement declared Meng broke no US or Canadian laws and demanded Canada “immediately correct the mistake” and release her.

Beijing asked Washington and Ottawa to explain the reason for Meng’s arrest, said a Foreign Ministry spokesman, Geng Shuang. He said arresting her ‘violated her human rights’.

Meng is a prominent member of China’s business world as deputy chairman of Huawei’s board and the daughter of its founder Ren Zhengfei, a former Chinese military engineer.

Despite that, her arrest is unlikely to derail trade talks, said Willy Lam, a politics specialist at the Chinese University of Hong Kong.

“I think too much is at stake for Xi Jinping. He desperately wants a settlement,” said Lam.

People walk past a Huawei retail shop in Beijing. China has demanded Canada release a Huawei Technologies executive who was arrested in a case that adds to tensions with Washington. Picture: APSource:AP

INTERNATIONAL TENSION

The timing of the arrest is awkward following the announcement of a US-Chinese ceasefire in a trade war that has its roots in Beijing’s technology policy. Meng was detained in Vancouver on Saturday, the day Trump and Xi Jinping met in Argentina and announced their deal.

US national security adviser John Bolton told NPR that he knew of the pending arrest in advance. He declined to talk about the specifics of the case and said he didn’t know if Trump knew about before it happened but added that there has been enormous concern about the practice of Chinese firms like Huawei allegedly using stolen US intellectual property. He said that would be a major subject of negotiations with China.

Canadian Prime Minister Justin Trudeau said he was given a few days advance notice of the intention of Canadian authorities to arrest her but said it was the decision of law enforcement and there was no political interference. “I can assure everyone that we are a country of an independent judiciary and the appropriate authorities took the decisions in this case without any political involvement or interference,” Trudeau said.

He also said he could not comment further because of a publication ban. A spokesman for Canada’s justice department said Meng requested the ban and the department could not comment further.

Gordon Houlden, director of the China Institute at the University of Alberta, said Canada and the US have an extradition treaty and Canada has obligations that not even the prime minister can change.

“The prime minister cannot call up the judge and say ‘please free this person.’ Short of abrogating the treaty, this will roll on,” Houlden said. “This is a really tough one for Canada. Our hands are largely tied by the extradition treaty.” David Mulroney, a former Canadian ambassador to China, said US and Canadian business executives could face reprisals in China.

“That’s something we should be watching out for. It’s a possibility. China plays rough,” Mulroney said. “It’s a prominent member of their society and it’s a company that really embodies China’s quest for global recognition as a technology power.”

A Chinese woman rests near boards displaying stock market prices in Beijing, China, after stock prices skidded following the arrest of a senior official at Chinese telecoms equipment maker Huawei. Picture: APSource:AP

TRADE ‘CONTAINMENT’

Stock markets tumbled on the news, fearing renewed US-Chinese tensions that threaten global economic growth. Hong Kong’s Hang Seng lost 2.5 per cent and the DAX in Germany sank 1.8 per cent. In the US, stocks knocked more than 780 points off the Dow Jones Industrial Average before the Dow rallied to finish just 79 points down.

But the Ministry of Commerce signalled that Beijing wants to avoid disrupting progress toward settling a dispute with Washington over technology policy that has led them to raise tariffs on billions of dollars of each other’s goods.

China is confident they can reach a trade deal during the 90 days that Trump agreed to suspend US tariff hikes, said a ministry spokesman, Gao Feng. Trump’s tariff hikes on Chinese imports stemmed from complaints Beijing steals or pressures foreign companies to hand over technology. But US officials also worry more broadly that Chinese plans for state-led creation of Chinese champions in robotics, artificial intelligence and other fields might erode US industrial leadership.

“The United States is stepping up containment of China in all respects,” said Zhu Feng, an international relations expert at Nanjing University.

He said targeting Huawei, one of its most successful companies, “will trigger anti-US sentiment.”

“The incident could turn out to be a breaking point,” Zhu said.

Last month, New Zealand blocked a mobile phone company from using Huawei equipment, saying it posed a “significant network security risk.”

The company was banned in August from working on Australia’s fifth-generation network. On Wednesday, British phone carrier BT said it was removing Huawei equipment from the core of its mobile phone networks. It said Huawei still is a supplier of other equipment and a “valued innovation partner.” The Wall Street Journal reported this year US authorities are investigating whether Huawei violated sanctions on Iran.